The present invention relates generally to the field of consumer behavior forecasting, and more particularly to improving the effectiveness of response to solicitations.
Marketing campaigns are used to focus sales or solicitation efforts and improve desired results. A marketing campaign uses organized activities to promote a product or a specific result through the use of different mediums, typically using various types of advertising. Undirected advertising can be ineffective, costly and wasteful, therefore campaigns benefit from efforts that identify distinguishable groups that are most likely to respond positively to marketing solicitations.
Commercial solicitations, whether for traditional sales, direct sales or for contributions, make use of marketing techniques to identify contact sets having higher probability of responding. All forms of marketing carry a cost-benefit ratio, and determining the appropriate target audience for the marketing campaign is essential to positive returns. Variations of the recency, frequency, and monetary value (RFM) model have been widely applied in many commercial and solicitation areas, particularly in direct marketing. Recency (R) refers to a measure of how recently a contact responded to a solicitation, such as making a purchase or responding to a solicitation for contributions by making a donation. Frequency refers to the total number of responses a contact has made within a designated time period, such as the number of distinct purchases made within the last six months, for example. Monetary value refers to the total value of purchases made (or donations made) within a designated time period.
By applying an RFM model, marketing campaign decision makers can more effectively identify contact sets that are more likely to respond and therefore improve the cost-benefit ration of marketing, as well as improve overall results. To apply an RFM model requires accumulating data associated with the activities of responders to sales or contribution solicitations. Although RFM models offer a means to identify targeted audiences, shortcomings exist that fail to distinguish differences in contact data.